Net neutrality ensures internet providers are not our gatekeepers

Back in July 2011, a small Swedish company named Spotify started streaming music to American consumers. Earlier that year, Spotify had secured $100 million for entering the transatlantic challenge of competing for America’s ears against Apple iTunes, back then the incumbent in online music consumption.

Today, thanks to succeeding in its American adventure, the company is worth billions and has radically changed the music consumption paradigm around the globe.

ADVERTISEMENT

Net neutrality, the principle that internet providers are not allowed to block or establish paid “fast lanes” for internet content, was pivotal for Spotify’s successful expansion to the United States and subsequent consolidation in Europe and other parts of the world.

Without net neutrality, Spotify might have had to pay Comcast and other internet providers to reach consumers and compete against big incumbents, such as Apple iTunes and Google Play Music, that can always afford “fast lanes.” Instead, thanks to net neutrality, consumers could choose what music service to use and the better product succeeded.

The previous example shows how the rollback of net neutrality rules in the United States will have consequences well beyond American borders. If the Federal Communications Commission, which regulates telecommunications services in the United States, rolls back its net neutrality rules, I expect three things to happen against the interests of consumers and entrepreneurs worldwide.

First, other countries will follow the American example and roll back or erode their net neutrality rules, assuming they have any. Given that the United States’ economic and regulatory policy is a role model for other nations, we may see a domino effect.

Broadband providers elsewhere will point to American developments and leverage them as an example of what to do. “If America does it, why can’t we?” is a powerful rhetorical question everywhere.

Recall that even though Chile was the first country to codify net neutrality, the concept was first introduced to the public debate by the American academic Tim Wu in 2003. Authoritarian regimes will use the net neutrality rollback as an excuse to establish more controls over internet content, harming freedom of speech.

Second, non-American internet entrepreneurs will have a harder time entering the United States market, harming their chances to grow and fundraise, reducing consumer choice. Despite a multiplication of innovation and financing hubs outside the San Francisco area and overseas, it is critical for many startups from all over the world to enter and succeed in the American market.

According to a 2016 report from the Martin Prosperity Institute based on data collected from Thomson Reuters, 70 percent of the total global venture capital is located in the U.S.

The location of venture capital is not the only reason why foreign startups need to be able to enter the American market.

If you are from an entrepreneur from a smaller nation, it makes economic sense to scale your business for America, where you have more than 300 million consumers who share a common language, a relatively uniform culture, weekly if not daily internet use, and they are willing to try new products and services.

For now, nowhere else offers the same benefits of scale that entrepreneurs receive in the United States.

Third, and as a consequence of the previous two points, consumers everywhere will be harmed by less innovation. If the FCC rolls back net neutrality rules, it is going to be harder for Americans to innovate. The world has already benefited enormously from the ecosystem a neutral internet enables.

We wouldn’t have half as many of the products and services that improve our lives if it weren’t for net neutrality. It is also going to be especially difficult for foreign entrepreneurs to innovate, as scaling in the often necessary American market is going to be more challenging and expensive.

Consequently, not only will consumers have to pay more to access the internet, but they’ll also benefit less from innovation online because there will simply be less of it.

The FCC leadership and the White House are totally out of touch with popular opinion in their desire to roll back net neutrality. Repealing net neutrality will turn internet providers into gatekeepers of innovation and speech.

Gus Rossi is global policy director at Public Knowledge, a Washington, D.C.-based public interest group that is involved in intellectual property law, competition and choice in the digital marketplace, and an open standards/end-to-end internet.